Baltic Journal of Economic Studies

INFLUENCE OF CORRUPTION ON THE ECONOMIC DEVELOPMENT OF UKRAINE IN TERMS OF REFORMATION: A RETROSPECTIVE ANALYSIS

Lesia Savchenko, Anatolii Subbot, Yurii Demianchuk

Abstract

The subject of the study is to investigate the causes of the influence of corruption on the economic development of Ukraine in the context of reform. Corruption occurs at all levels of society and in some way interferes in all elements of society, and thus negatively affects democracy and economic development of the country. The research methodology involves a retrospective analysis of the problem of inveteracy of corruption associated with the study of its impact on the economy. It is precisely endemic corruption that threatens the formation of Ukraine’s stability and its transition to a market economy. Corruption as one of the most ancient phenomena in society exists in every modern country. The general understanding of corruption is that corruption is detrimental to economic growth. There are also many causes of corruption, namely, a cultural factor, a psychological factor and, therefore, factors associated with the system can cause corruption in every society. The methodological basis for the research was the works of Tylchyk O.V., Bilous V.T., Subbot A.I., Lytvynenko V.I., Hvozdetskyi V.D., Popovych V.M., Bodnarchuk O.H. in the field of administrative law and issues of counteracting and combating corruption, which indicate that there are some factors, such as monopoly power, discretionary power, and low civil servants’ liability, that may provide opportunities for the development of corruption. The purpose of the article was to analyse the causes of the impact of corruption on the country’s economic and political development. Today, corruption has a wide range of activities that undermine the country’s development. Researchers argue that corruption affects the country’s economic growth. However, contradictory evidence was found that corruption can have a positive effect on the country’s economic development or have no significant impact on economic performance. On the basis of analysis of these works, it was established that corruption is the result of institutional weakness, with a potential adverse effect on the country’s economic efficiency. Corruption negatively affects the efficiency of public spending, reduces budget revenues and increases its deficit, impedes foreign direct investment, reduces the effectiveness of international assistance, and hinders economic development. As a result of the analysis, ways to reduce corruption are identified, which suggest a policy of reducing corruption in Ukraine. The result of the study was conclusions on the need to develop and form a coherent system of scientific and legal views on identifying effective anticorruption measures, optimizing and improving the effectiveness of anticorruption activities, with the involvement of international experience in coordinating and minimizing information leakage and engaging civic initiatives among the non-public sector.

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